Downtown Is Coming Back.
Strong leasing activity in the second quarter of 2010 in the Columbia, South Carolina, office market indicates the market may have reached its lowest point in the first quarter of 2010. Although the market experienced negative absorption during the first six months of the year, an abundance of activity bodes well for the recovery of the market for the remainder of 2010.
Columbia’s Central Business District suffered a dramatic uptick in vacancy over the previous 24 months, with the vacancy of Palmetto Center and the large blocks of space left vacant due to the completion of the newest office tower, Main & Gervais. To that end, however, it is becoming increasingly difficult for larger tenants to find quality space in Columbia’s CBD.
The CBD posted a direct vacancy rate of 22.9% at mid-year 2010, but the Class A vacancy rate was much lower at 11.9%. Average asking rental rates in the Class A market bottomed out at year-end 2009, posting a $0.46–per-square-foot increase during the six month period ending June 30, 2010. This activity can be largely attributed to the growing perception among tenants of affordability within the CBD; declining asking rental rates, coupled with landlord concessions such as free parking, moving allowances and increased tenant improvement allowances, have made Class A buildings in the CBD very attractive to tenants looking for space.
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